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A £bn here a £bn there…

According to varioussources the nitty gritty of the Government’s bank recapitalisation plan is going to be announced tomorrow morning. The coverage reminds me of a quote from The West Wing “A billion here a billion there. Sooner or later it starts to add up to real money.” The important point is what will our £39bn/£50bn get us? By my back of an envelope calculations, based on Friday’s closing share prices and the current rumours, taxpayers are indeed (as per ft.com) about to become the controlling shareholders in HBOS and RBS.

Of course the HBOS situation will then be further confused by the rumoured £5bn investment in Lloyds TSB and the (apparently) still planned merger of the two.

Finally there is the issue of whether given the current investment environment we should even be investingon the basis of Friday’s closing price anyway? Shrewd investors know how to take advantage of weakness. It will be interesting to see what deal Gordon Brown will have negotiated for us as his track record isn’t the best or perhaps he is already in bed.